UNDP supports capacity building in contract negotiations for Government officials

Apr 24, 2017

The United Nations Development Programme (UNDP), in collaboration with the Columbia Centre for Sustainable Investment (CCSI) and the Ministry of Energy and Minerals (MEM), recently conducted a one-week workshop on “Negotiating A Good Deal in The Oil and Gas Industry”. With the recent major discoveries and extraction of natural gas, adding to the vast natural resources that the country is blessed with, including wide varieties of minerals, Tanzania is well positioned to achieve its goal of becoming a middle-income semi-industrialized country by 2025, as set out in the national plans notably the Five Years Development Plan (FYDPII). However, the extent to which the positive effects are realized through these resources depends on the capacity within the Government to negotiate contracts that benefits the country at the same time attract foreign direct investments (FDI).

The purpose of the workshop was to build capacity within Government agencies involved in negotiating contracts on behalf of the country. The workshop was a tailor-made, one-week course developed by the Columbia Centre for Sustainable Investment (CCSI) and UNDP Tanzania. It was attended by fifty senior Government officials from the Ministry of Energy and Minerals (MEM), the Attorney General Chambers (AGC), the Tanzania Revenue Authority (TRA), the Petroleum Upstream Regulatory Authority (PURA) and Tanzania Petroleum Development Corporation (TPDC).

In his opening remarks, UNDP Acting Country Director, Mr. Yahya Ba said that the purpose of the workshop could not be underestimated given the recent developments in the extractives industries. He reaffirmed UNDP’s commitment to supporting the Government of Tanzania and hoped that at the end of the workshop the participants can put into practice what they learnt for the greater benefit of the country. Ms. Evelyn Makala, Director of Contracts at the Attorney General Chambers, outlined the expectations on behalf of the Government and hoped for lively discussions and interaction from the participants throughout the week.

Throughout the workshop, participants were trained on a wide-range of important issues related to oil, gas and mining contract negotiations ranging from the fiscal policies governing the extractive industries to the legal framework. There was also focus on local community engagement, how to avoid pitfalls in the negotiations strategy and the need to address the environmental impact. The experts from CCSI drew on their vast international experience having been involved in negotiations for both Governments and major oil companies.

In closing, Commissioner for Minerals, Eng. Benjamin Mchwampaka said that even though the Minerals Policy of 2009 and Mining Act of 2010 require the citizens to benefit from the minerals extracted in Tanzania, it has not been the case due to challenges in negotiating and implementing contracts. He urged the participants to use the knowledge gained from the training to negotiate contracts that will ensure sustainable benefit to the country.

“Government officials involved in negotiating contracts should use knowledge gained in this training workshop to effectively and competitively negotiate good contracts in the oil, gas and mining industries for the benefits of the current and future generations”

-Eng. Benjamin Mchwampaka, Commissioner for Minerals

The training was supported through the “Capacity Development in the Energy Sector and Extractive Industries (CADESE)” project, which aims to, among other things, enhance the national capacity in managing the energy sector and extractive industries by supporting MEM and AGC in strengthening both policy and institutional capacities. One of the outputs of the project is to provide support to MEM, AGC and other relevant institutions through training programmes focusing on contracts negotiations skills.

In addition to CADESE project which is ending in June, UNDP Tanzania is also developing a follow-up stand-alone programme on extractive industries governance entitled the “Tanzania Extractive Industries Governance Programme (TEGOP)”. The specific strategy of this new programme is to support the Government of Tanzania in improving the governance of the extractive industry in terms of effective institutional framework, policies and regulations as a means of achieving sustainable and inclusive socio-economic transformation that makes available opportunities for translating natural resource wealth into improved lives of both men and women.